life insurance interest debt and SOL

[fdc555]

What is the name of your state?undefinedundefinedWhat is the name of your state? New Jersey. I borrowed $58,000 from my Whole Life policy in 1996. I stopped working due to health reasons in 1995 and needed the money. I stopped paying the policy in 1995 and was on disability option for two or three years. I filed for bankruptcy in 2001 but was not aware of any interest due to the insurance company or I would have included that also. In February of 2005 I recieved a bill demanding $4,700 in interest! Two questions, am I liable for the interest on my own money, and is there a statute of limitations on this"debt". I should note that this was the first demand for interest at all.

 

[BECBEN444]

Did you find the answere to question?

Colorado
I have a similar situation, I did include the loan from life insurance in bankruptcy. The insurance company recieved notification of filing, they sent me a letter stating "an insurance loan is not considered a debt in bankruptcy law therefore is not effected in bankruptcy" They did not send any thing to trustee or objection of any kind. After discharge they sent me a bill for loan and interest on loan.Was your interest discharged?

 

[somarco]

Loans against a life policy are repayable at the option of the owner. Same for the accrued interest.

Any outstanding loan balance + accrued interest serves to reduce the death benefit.

Some policies will lapse after a period of time if the loan or interst is not repaid, others will not. If the policy lapses income taxes may be due.

 

[BECBEN444]

COLORADO
Is there a bankruptcy law that refers to what makes a loan on cash value of an EXEMPT life insurance policy and/or interest non-dischargeable?

 

[somarco]

I am not familiar with CO bankruptcy laws, I am merely stating what is universally true with regard to life insurance policy loans.